Thanks for asking, Miss Missy!
While business names and entities may possibly be used as a tool for
ill-intentioned actions, there are many less sinister, more commonly
employed, reasons for the use of a fictitious business name.
The official purpose of Fictitious Business Name filings is intended
to aid customers, consumers and creditors to identify the person or
persons behind an assumed business name, rather than obscure identity.
Such filings make it more easily possible to locate, research and
track down those people who might be in the habit of changing their
business names to confuse and avoid creditors. By requesting publicly
available records from the state certifying governance agency, the
individuals behind the corporate names may be found and researched.
Most states also require ongoing amendment of corporate information
within a set time limit following any changes to the original
information.
FILINGS MANDATED BY STATE OR LOCAL LAW
**************************************
Some state and local laws mandate filing of Fictitious Business Names
for corporate entities. For instance, corporations are generally
registered with a state's corporation governance division, such as the
Secretary of State, as part of their incorporation proceedings. This
name is their "legal name." However, if a corporation sells products
or services under a different name, it is generally required that a
Fictitious Business Name be also filed within the state or county
where the business is headquartered, especially when a corporation may
offer a variety of products under various trade names, even slightly
different variations of the same product, and may wish to brand and
market each one separately. Michelob, Bud, Busch, provide an example,
although these products all happen to be registered to Budweiser
Corporation. Subsidiary distributors in some markets might be able to
obtain distribution rights to only one of the products, and therefore
a separate Fictitious Business Name filing would be need to be filed.
In addition to fulfilling regulatory requirements, this is also a
prime method used for branding and marketing.
SUBSIDIARY OWNERSHIP
********************
Corporations may own subsidiary companies or corporations. These
subsidiaries may have their own set of corporate or company directors
(see What is a Corporation? below). The primary purpose of state
requirement for Fictitious Business Name filing is to provide
customers and consumers a simple method of identifying exactly WHO the
company officers ARE, and offering a contact method.
ENHANCED TRADEMARK PROTECTION
*****************************
Distinctive Fictitious Business Names offer more trademark protection.
Entities like Kodak, eBay, or TurboTax are entitled to receive
protection under federal and state trademark laws, while common or
ordinary names (such as Smith's Internet Services, Jack's Consulting,
or Hosting.net) would not. A distinctive trade name is often more
memorable than more ordinary names.
OBSFUCATION
***********
Some business entities may seek to obscure corporate ownership or
liability. If this purpose is intended from the beginning, generally a
more robust effort would be made to hide the trail of actual ownership
through the use of shell or shelf corporations, geographically
separate from the entity itself. DBA's in themselves are more
difficult to manipulate after initial filings.
RESOURCES
*******
Nolo Law Center
Choosing a Business Name FAQ
http://makeashorterlink.com/?X15625AB3
The above link may turn out to be dynamic, in which case, you may
proceed to
http://www.nolo.com ... and select the following chain: Law Centers >
Encyclopedia > Small Business > Choosing a Business Name >
Nolo Law Center
Picking a Winning Name for Your Business
http://makeashorterlink.com/?K68623AB3
Business Organizations Part III - Corporations
http://www.outhousecounsel.net/WebPBB4.pdf
PDF Format - Requires Adobe Acrobat Reader
LegalZoom Law Library
What is a Corporation?
http://www.legalzoom.com/law_library/corporations/what.html
FindLaw
State Corporation and Business Forms
http://guide.corporate.findlaw.com/11stategov/indexcorp.html
Shelf Corporations
http://www.bizfilings.com/products/shelfcorps.htm
Shell Corporations - Fraudaid
http://fraudaid.com/Dictionary-of-Financial-Scam-Terms/shell_corporations.htm
Points to Southwest Investments, LLC: http://www.swi-investments.com/
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